Brett Kavanaugh Could Be Good for Ethanol

by John Siciliano (Washington Examiner) President Trump's nomination of Judge Brett Kavanaugh to the Supreme Court could be good news for the ethanol industry and clean energy programs where adherence to the law is often challenged.

Trump said Kavanaugh, in his twelve years as a judge on the D.C. Circuit Court of Appeals, has demonstrated his ability to “set aside" political views "to do what the law and the Constitution require.”

It isn't entirely clear, but that might have been the message Trump was trying to convey to Sen. Joni Ernst, R-Iowa, just hours before Monday's announcement. He told the senator and a group of Iowa state officials in her office that they are going to "love" his court nomination.

Ernst has also led the charge against former EPA chief Scott Pruitt's mismanagement of the ethanol program, which had stoked the ire of farmers and the ethanol industry, who sued Pruitt over his granting of waivers to oil refiners. The waivers exempted them from having to blend ethanol in order to manage the cost of abiding by the regulation.

This is where Kavanaugh could be good for the ethanol industry, if the regulation goes to the Supreme. His previous rulings also show that he does not always act in favor of fossil fuel companies as environmental groups argue.

Kavanaugh, in one of his first decisions on the ethanol program under Trump, rejected all arguments by oil refiners and renewable fuel groups alike, except one, in Americans for Clean Energy, et al., v. EPA and Scott Pruitt almost one year ago on July 27.

"We reject all of those challenges, except for one: We agree with Americans for Clean Energy and its aligned petitioners that EPA erred in how it interpreted the 'inadequate domestic supply' waiver provision," Kavanaugh wrote in penning unanimous three-judge decision.

He ruled that EPA did not have the authority to apply the supply waiver as it had done in setting the annual Renewable Fuel Standard in the preceding year, and must therefore redo the fuel targets under the correct interpretation of the law, which was a victory for ethanol supporters.

Kavanaugh wrote that the law "does not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers."

The only authority that EPA has in reducing the amount of ethanol and renewable fuel refiners can blend is if there is a lack of supply of corn ethanol. This was not the case for either the 2015 or the 2016 annual biofuel requirements.

"We therefore grant Americans for Clean Energy’s petition for review of the 2015 Final Rule, vacate EPA’s decision to reduce the total renewable fuel volume requirements for 2016 through use of its 'inadequate domestic supply' waiver authority, and remand the rule to EPA for further consideration in light of our decision," Kavanaugh wrote.

In that ruling, he said the oil industry and refiners arguments were not strong enough to be granted regulatory relief from having to abide by the Renewable Fuel Standard. READ MORE includes VIDEO

Excerpt from Argus Media: Kavanaugh rebuked the US Environmental Protection Agency (EPA) for attempts to modify federal fuel blending mandates, waive penalties for industrial plants, or tackle climate change.

The Chevron precedent was established in a 1984 case involving the oil company and the Natural Resources Defense Council. The case challenged the EPA's authority to issue quality rules. Justice John Paul Stevens, writing for the majority, said that courts should defer to agency interpretations of ambiguous laws so long as the interpretation is reasonable.

Kavanaugh openly criticized the precedent in recent years, echoing concerns from the late justice Antonin Scalia. In a 2016 Harvard Law Review article, Kavanaugh wrote that Chevron was a "judicially orchestrated shift of power" from Congress to the executive branch. He warned the Chevron deference encourages agencies to be "extremely aggressive" in seeking to squeeze their policy goals into ill-fitting statutes. Judges, rather than agencies, are best equipped to interpret what a statute really says, Kavanaugh wrote.

The same skepticism informed a rejection of an attempt by EPA to assert greater control over federal renewable fuel blending mandates in 2015.

Congress may have made the Renewable Fuel Standard (RFS) untenable, he wrote in a 2016 opinion rejecting EPA's attempt to tailor requirements based on US consumption rather than on total supply.

"But the fact that EPA thinks a statute would work better if tweaked does not give the EPA the right to amend the statute," Kavanaugh wrote for the majority.

And in 2013, Kavanaugh was flatly against EPA assuming authority to grant waivers allowing the broader sale of 15pc ethanol gasoline blends, an idea contemplated this year by the Trump administration as it sought to broker a deal on fuel mandates between farmers and refiners.

"The E15 waiver plainly violates the statutory text," Kavanaugh wrote in a 2013 dissent to dismissing a lawsuit filed by food groups and refiners. "Yet EPA still granted the waiver. EPA's action simply cannot be squared with the statutory text." READ MORE